Now, that war to win over subscribers at any cost is over.
Streaming itself isn’t going anywhere — it’s the present and future of Hollywood — but the spend now, ask questions later days look to be coming to an end as these services mature and media companies cleave to what makes money.
“The streaming wars are over because subscriber growth has come to a halt,” Michael Nathanson, a media analyst at MoffettNathanson, told CNN Business. “You’re fighting a war in a land that has no more resources in it.”
Despite Disney+’s growth in the third quarter, the company announced it was revising its long-term forecasts for the platform. Disney is just one of many streaming providers that have revised their strategic plans lately.
“When the streaming wars officially kicked off in late 2019, early 2020, the major services outlined their five year goals,” Matthew Ball, CEO of Epyllion, an investment and advisory firm, and former Amazon Studios executive, told CNN Business. “We’re halfway there now and thus executives must confront whether their targets are achievable or even desirable, and this is leading to many strategy changes — as it should.”
So streaming is evolving, but if the streaming wars phase is coming to an end what’s next?
The Rumble of the Bundles
Nathanson believes that the next phrase of the streaming revolution will be one of consolidation and bundling.
“Services can get together to form new services or do what Disney is trying to do and bundle the heck out of two or three other services,” he said. “As we saw in pay TV, bundles work. You have your broadband, your phone and your video with one place and that worked for awhile.”
This is why it’s no coincidence that even though Disney raised prices across many of its tiers, it didn’t touch its premium Disney bundle, which consists of Disney+, Hulu and ESPN+ and remains $19.99.
This move appears to be Disney’s way of pushing consumers to sign up for its entire slate of services rather than just one.
Warner Bros. Discovery is also going down the consolidation path. The company announced last week that the long-awaited merger of its services, HBO Max and Discovery+, will debut in the US next summer.
So if the first phase of the streaming revolution was the “Streaming Wars” the next phase could be dubbed the “Rumble of the Bundles.”
As for Ball, he believes big media companies will do what they’ve always done: “operate in multiple different media categories.”
“For years, Hollywood has been primarily focused on streaming video, but they’re now shifting elsewhere,” he said. “More gaming, sometimes blockchain/NFT, experiential exhibits, etc.”
The streaming wars are dead. Long Live Streaming
With streaming transforming into something new, consumers are in for a shock to the system.
Streaming trained millions of viewers around the world to expect a lot of ad-free content for an inexpensive price. But that expectation was unsustainable, according to Nathanson.
“Wall Street just paid people for subscribers, and because it paid people for subscribers, companies did not care about the economics,” he said. “They were willing to do whatever they could to chase subscribers.”
In other words, the grow-at-any-cost strategy could never last, and now we’re at a point where companies and Wall Street are looking at balances sheets and focusing on profitability and revenue as much as scale.
And the truth is that even though the streaming wars are ending — and consumers are paying the price — there’s really no place else for any of them to go.
Streaming is here to stay. It’s the focus of Hollywood and how millions watch TV shows and movies. That’s not changing even if the dynamics and strategies of the businesses behind them are.
“Video remains the most popular leisure activity in the world,” Ball said. “Streaming may change, but consumers will adapt. They love video too much.”